The Argentine government will postpone all three of its July payments to the International Monetary Fund (IMF) to the last day of the month.

According to the original schedule, the government should have paid the month’s first maturity —for US$1.2 billion— on Friday. The second and third payments —which amount to US$1.4 billion— were scheduled to occur on July 14 and 28.

Sources in the Central Bank, the Economy Minister, and the IMF confirmed to the Herald that the government will make a single payment on July 31 instead, which would amount to US$2.6 billion.

“The authorities have exercised their right as a member to pool three repurchases (principal payments) due in July and pay them at the end of the month,” a source in the IMF told the Herald. The source also confirmed that there is no limit on how many times a country can do this.

In 2022, the government and the IMF signed an Extended Fund Facility agreement after renegotiating the US$44 billion debt former President Mauricio Macri acquired in 2018. The deal includes an economic program that Argentina must comply with to receive disbursements every three months, which the government uses to pay the previous debt.

The IMF staff’s upcoming fifth review of the program will evaluate Argentina’s performance until March. If favorable, the review would lead to a 3 billion SDR (US$4 billion) disbursement.

The IMF and the Economy Ministry are still renegotiating changes in the program. Issues on the table include changing Argentina’s international reserve accumulation targets, allowing the state to intervene in the secondary bond market to stop runs on the Argentine peso, and the possibility of the Fund making part of this year’s disbursements earlier than scheduled.

A team headed by Economy Ministry Chief Advisor Leonardo Madcur and Economic Programming Secretary Gabriel Rubinstein was set to go to Washington yesterday to renegotiate the deal, but the trip didn’t come to fruition. The Economy Ministry has not confirmed a new travel date.

Economy Minister Sergio Massa has told his inner circle that he won’t “send any hostages,” meaning he would only send people to the United States if he knew the negotiations were virtually finished. The indefinite postponement of the trip seems to indicate that that is not the case.

Last week, the government paid US$2.7 billion to the IMF in yuan —which were freely available from Argentina’s currency swap with China— and Special Drawing Rights (SDR, the IMF’s exchange asset), without using the Central Bank’s scarce U.S. dollar reserves. At that point, according to consulting firm Ecolatina, the country’s net international reserves were at a record low of negative US$3.5 billion.

But June’s payment to the IMF wasn’t the last big reserve drain, since the government announced that it will pay US$ 982 million in bond coupons to private creditors this week.